Finance department most likely to produce internal fraudsters
SO YOU THOUGHT lawyers were sharks? It turns out that it’s the bean-counting finance nerds that you really have to worry about. According to research by KPMG’s forensic auditing division reported in Profile of a Fraudster 2007, 36% of fraudsters were found to work in the finance department followed by operations/sales (32%) and company CEOs (11%).
The survey also reported that your typical fraudster is most likely to be middle-aged and male: KPMG found that 85% of fraudsters were men while 70% were aged between 36 and 55. What’s more, a full 89% were internal employees.
Probably most disturbing is the finding that there appears to be no correla- tion between perceived loyalty and actual honesty. In 36% of profiles fraudsters had been working for the company for two to five years before committing fraud, while 22% had been with the company for more than 10 years. Just 13% of perpetrators had worked at their companies for less than two years prior to committing fraud.
Also interesting is that theft of cash (25%) is the preferred modus operandi, followed by other fraud (19%), false financial reporting (15%), kickbacks (13%) and theft of other assets (6%).
And if you’re an MD thinking of giving a fraudster a second chance, consider that 91% of perpetrators didn’t stop after one fraudulent act but committed multiple acts of embezzlement.